Scientific evidence for the dietary treatment of type 2 diabetes (T2D) is insufficient. The study group hypothesizes that a lower carbohydrate content in the diabetic diet than the recommended 55 energy percentage (E%) will decrease the postprandial glucose excursion. This will reduce postprandial insulin concentration, which together with lower glucose concentration leads to less fat accumulation in the liver and muscle tissue, resulting in an improved insulin sensitivity which together with a reduced glucose load improves the glucose metabolism. This clinical study will examine in subjects with type 2 diabetes the effect of highly controlled dietary low carbohydrate intervention on metabolic pathways with respect to insulin action, pancreatic islet function, lipid metabolism, ectopic fat accumulation, incretin hormones, low grade inflammation in plasma and adipose tissue, novel measures of fatty acid metabolism, and heart rate variability, respectively. The studies exhibit the potential to reform dietary recommendation aiming to prevent and ameliorate type 2 diabetes.